 QuickBooks Online 2023, 1099 reports. Get ready to start moving on up with QuickBooks Online 2023. We're going to be using the free QuickBooks Online Test Drive Searching in our online search engine for QuickBooks Online Test. Support Accounting Instruction by clicking the link below, giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical, reasonable fashion, making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files, and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it. Drive selecting the option that has Intuit.com and the URL Intuit being the owner of QuickBooks. We're going to be picking the United States version of the software and verify that we're not a robot. Zooming in by holding down control up on the scroll wheel currently at the 125% zoom in cog dropdown. Just to note that we're in the accountant view as opposed to the business view. We'll try to toggle back and forth between the two views so you can see where stuff's located in each of them. Right click it on the tab up top to duplicate it as we do every time. We're going to put our major reports in the duplicated tabs. Right click in the duplicated tab to double duplicate as the tab to the right things. We're going to go to the tab to the middle reports on the left. Open up the balance sheet report as that's thinking tab to the right reports on the left. Open up the profit and loss, the P and the L. Close the hamburger otherwise known as the hand boogie and to the range change from a 1-0-1-2-2 tab, 12-31-2-2 tab, run it to refresh it, middle tab, closing the boogie, scrolling up, ranges to the changes, a 1-0-1-2-2 tab, 12-31-2-2 tab, and run it to refresh it. That's the setup process that we do every time. We've got the major two financial statement reports, pretty much all other reports given us more information on one or multiple line items of these major two financial statement reports. This one we're looking at the 1099 reports which kind of give us more detail on the expense side of things generally. However, there's an added complication and added wrinkle which is taxes. Taxes always add an added wrinkle. So let's go into that one. We're going to go right click on the tab to the right. Let's duplicate again so we can look at these 1099 reports. We're going to go then to the reports on the left hand side and then close the hamburger. Now I like to just type up top 1099 because sometimes they put the reports in different areas. So you've got the transaction detail report. You've got the contractor balance summary and then you've got the contractor balance detail. Oftentimes the summary is what we would be looking for when we're trying to populate our 1099. So let's open that and then just give a quick discussion on the whole 1099 process. So I'm going to close up the hamburger, scroll up top. We've got all dates so I'll keep that up top. Actually let's change it to a custom date up top. Custom date and it's going to go from 010122 tab, 123122 tab. Run it to refresh it. Okay so what are the 1099s in the United States? We have the reporting requirement of issuing 1099s. Quick recap on how this works. We have an income tax in the United States. Therefore the government wants to kind of look over people's shoulders in terms of the income side of things to make sure they're getting paid. Every business transaction has a payer and a payee. The one that's receiving money in any given business transaction on the receiving side of the table possibly has income that the IRS would like to tax. The person paying then possibly has a business expense that is actually good for the business owner. So the IRS has leverage on the payer of a business transaction to get them to kind of rat out or tell them about the money that they gave to the payee. So they're going to go to the payer side which is going to be us every time we buy something from a vendor and say we want you to give us a 1099 form to the government as well as the vendor but the government is really who wants it here. And the government can then double check to see that the recipient of the money has kind of paid their taxes. That's the idea. Now there's some general rules for the 1099. I won't go into them in detail but the general idea would be that the government is mainly concerned with small contractors. Why? Because they assume that big companies, if the company is a company and not a sole proprietorship, a contractor, they already have their hooks in them. The government has other ways to make sure that those companies are reporting their income. They're concerned with the little guy that's going to not record their income. So usually you're talking about your 1099 requirements for people that you paid, you paid money to vendors, you paid them to a corporation, then the government's not usually worried about them. You paid them to a sole proprietorship. Those are those slippery small guys that the government wants to double check on. So the sole proprietors are the ones that you have to kind of worry about. Then there's a dollar amount which is usually pretty low like $600. So generally what you have to do is go through all of your vendors, look for all those that are non-incorporated sole proprietors, and then make sure that you're complying with the 1099 requirement or else you're going to get hit by the IRS possibly for not complying with it. That's the general idea. So what you have to do then to comply with that in order to generate these reports is that every time you add a 1099 that could be subject to issuing, I'm sorry, every time you add a vendor that may be subject to issuing a 1099, you want to mark the vendor as possibly being subject to a 1099 so that you can run this report. Now the logistics of filing a 1099 are way easier than say a W-2 kind of requirements for an employee. So usually you might just kind of get your own forms for the 1099 forms and then run a report like this in order to issue your 1099s at the end of the year for a small business. Or you can do it within the QuickBooks system possibly. They can help you process the forms. Now notice that the 1099s aren't the same as payroll. Payroll is way more complex. So payroll you would almost certainly want to do payroll within or someone have something help you out to process the payroll. The 1099s are pretty easy compared to payroll. So you could kind of process the report and then just do your own 1099s, get the forms and do your own 1099s based on this report or you can process the payroll through the 1099s through the QuickBooks systems. The problem is that this 1099 report would only be accurate and be able to help you comply with your 1099 reporting requirements if as you're making payments throughout the year, as you're adding vendors, when making payments you're marking off those vendors that are going to be needing a 1099 at the end of the year. Those usually being the ones that are non incorporated, the little guys, the little vendors, the sole proprietors. So at the end of the year, many times the business is faced with the problem of saying I'm not sure if this report is accurate and they got to go through their vendor list to try to make sure that they've marked off those vendors that they need to issue a 1099 for. So there's a couple ways you could do that. We could go to the tab to the left and we could just go into our expenses on the left-hand side and go through our list of vendors and then just sort through our vendor list and look for those vendors that are non-incorporated. They're non-corporate vendors and then determine whether or not they are a corporation or not. We can usually determine by the name if they're incorporated and then sometimes the name is a little, we don't know if they're incorporated or not and then we can choose the ones that we're iffy about and do further research contact the vendor possibly to determine whether or not we need to issue a 1099 to them. Now, if we do need to issue a 1099 to them, we're going to need their EIN number, which is kind of like a social security number for a business if they don't have one because they're sole proprietorship. We're typically going to need their social security number. Therefore, when you do business with small businesses, sole proprietors, you want to ask that typically upfront. So you don't run into this problem at the end of the year. And if you go on to the IRS website, which is at irs.gov, you can look up, say, a W-9 form to help you with that requesting process, request for taxpayer identification number. You need to have that because, again, what you're really trying to do is give this information not to the contractor, although you're required to do that. The IRS wants it, the government wants it, and the government wants to know who they are in terms of address and identification number so they can double-check that they're reporting the income on their taxes. So this method works pretty good, but sometimes you might have a lot of vendors in here that you actually didn't pay because maybe you paid them in the past and you didn't do business with them in the current time frame. It would be best to go through these vendors and say, if I'm not doing business with them anymore, I'll make them inactive and you can really clean up your vendor's list. However, you might say, look, I'd like to just run a report for people that I've paid in the current time frame, and then that might limit this list a little bit so I can then find the ones I need. So let's go to the tab to the right. I'm going to right-click on this tab and duplicate this tab again and look for a report that might give us that information. Reports down below. I'm going to close up the hamburger and I'm going to go down to the expense reports down here, which are the expense reports. Here they are. Let's make it a little bit smaller and now I messed the whole thing up. So the expense reports are here and then I'm going to look at the expenses by vendor summary. So expenses by vendor summary and then I'm going to change the date up top 010122 tab, 123122 tab and run it. So now you've got your expenses broken out by how much you paid to each of these and this might be a little bit less of a list just giving you the information for those that you actually paid. Now note that this report will only work if whenever you paid someone you applied the vendor properly so that I can have a sub ledger of the vendor. Sometimes when people use bank feeds they forget to add the vendor and they can still record the transaction that's going to make it difficult to comply with your 1099 requirements but most of the time this report could be another one to look at. It also gives you the dollar amount for that timeframe so you can see if they're over the threshold which I think is like $600 but even if they're under the threshold if they're subject to a 1099 you still want to mark it off so that the report can be run based on the threshold of the dollar amount can be run when you run like this report for example. Okay so let's go back to the first tab now if you find the 1099s or the vendors that need to be 1099s so now I'm in the vendors tab let's say this person needs to be 1099s I can edit them and now we've got that familiar editing tab and then I'm going to scroll down to the tax information we would need to give them a tax ID so it would usually be like a 9.5 type of number that we would have and we're going to track the 1099 information here and that ticking of this off should then add this one to our list when we run the 1099 report so we got to make sure that all the vendors that are applicable have been ticked off thusly so I'm going to save that and then if I go back to the report here and I run my 1099 report run it again now we've got the two people in here there was no one paid to this one so it's not really applying the dollar threshold but there you have it so that report can help you to kind of process the 1099s and once you have this report that's accurate you could purchase the 1099s and just fill them out based on this report essentially or you might want to process them using QuickBooks so if I go to the first tab here just to look at that processing setup I'm going to close this I don't know what it's doing there I'm going to close this I'm going to open up the hamburger and you can go into the taxes on the left hand side you've got sales tax and then you've got the 1099 filing so here's your little kind of 1099 filing wizard I'll just go through it quickly here it says get ready to file your 1099 forms this year there are some changes the 1099 filing process will walk you through so you could e-file the 1099s with the IRS on your behalf we e-deliver the 1099s so that means you're responsible to give the 1099s to the person you paid and to the IRS and then we print and mail copies of the 1099 to your contractors so let's just go through their process here again you don't have to go through QuickBooks to do this you might do this you know just buy the forms and do it but we're going to say I'm going to make a different address I'm just picking an address this is a Beverly Hills address for home for sale for 20 million dollars 9935 Kip Drive we're going to say this is Beverly Hills, California 90210 90210 boom and I'll save it and then the phone number I'm just going to say it's 5555 5555 it doesn't like that phone number how about 310291199 let's do that let's save it and the tax code I'm going to say is 95Tab and until it doesn't let me do that last bit so that's the tax code and so I'm going to say okay let's save it and then that's going to be our information that we would need this would be our identification number not the people were 1099 then it says map your QuickBook contractor payments to 1099 boxes so first select the checkbox for each type of contractor payment you record last year each payment type corresponds to a box on the IRS form 1099NEC and 1099 miscellaneous now if you want to look at those forms you can go to irs.gov and you can just type in 1099 NEC just to check it out and so there it is boom you can look at what it looks like and the instructions for it so you can't really print this out and use it you'd have to actually purchase the 1099s if you want to do it by hand but you know you can get an idea there's box one this is the most common 1099 if I did that again and I said into it I'm sorry not into it I'm going to irs.gov I want the 1099 miscellaneous and we can go into that one and form 1099 miscellaneous this is what this one looks like now the non-employee compensation used to be on this miscellaneous form but now it's got like its own form this is the most common one that you would be using and then other kinds of payments would be going here that's the general idea okay so that's what they're trying to do here and so then for each payment type selected select all the QuickBooks expense accounts you used last year so if you're not sure which expense accounts you use you can run a report okay so common payment types would be the most common so most of the time you would choose the non-employee compensation and you can choose the payment type it would be oftentimes something like contractor payment that you would make to them but maybe you just choose all of them for if that's the only type of 1099 that you're issuing because you probably just marked off the expense account as contractor payment or something like that but you might say hey I'm just going to say any expense account that I paid for someone who's under the threshold is going to be going to this format of non-employee compensation now if you have a more complex situation then that's where you can kind of differentiate so if I had a situation where I had to issue a 1099 on the NEC form as well as a 1099 on the miscellaneous form then I know I differentiate between those two I know I have to 1099 both of them but I differentiate between which box or which 1099 by selecting the account so if I had to issue rents then I would say that the expense account down here would be rents I would still mark them off the vendor as being someone I have to issue a 1099 for but I'm going to apply the expense account of rent expense and therefore it should pick the right 1099 in box to check off so that's how it kind of works but for most people you just got that non-employee compensation and then if I go to the next I can review and I can say okay does this match up and I can tie this out to my report that I generated and say okay if that matches out then I can basically continue here and then check that the payment add up only those contractors you paid above the threshold $600 so notice it looks like we didn't have any that were paid over the $600 there's where the threshold is applied it's a pretty low threshold so even though there's a $600 threshold that's why when you add the vendors you don't really want to think about the dollar amount you want to make sure you check them off if they're going to be subject to a 1099 whether they're above or below the threshold and then let the system apply the threshold requirement right here or when you do them by hand you apply the threshold requirement when you process and then you can finish the 1099s and obviously this is a demo problem so there's an issue with issuing them through the system here so that's the general idea with the 1099s closing this out just to take a look at the business view drop down business view to see where stuff's located in the business view you got the get things done page instead of the home page and then you've got the the reports under the business overview and reports and then you've got the tax information under the taxes tab down here and then we were looking at the 1099s